VALUE ADDING TO AGRICULTURE IN CENTRAL WEST NSW A NSW Government Initiative / This report has been prepared by: Regional Development Australia Central West Suite 4, 59 Hill Street (PO Box 172) ORANGE NSW 2800 / With funding from: / Date published: September 2016 / Author: Julia Andrews, Project Officer, RDA Central West / Additional analysis provided by: A.P. Sheere Consulting / About Regional Development Australia Central West Regional Development Australia — Central West is part of a national network of 55 locally managed, not-for- profit incorporated associations and is jointly funded by the Australian and NSW Governments. Our region extends from Lithgow in the east to Lake Cargelligo in the west and comprises the local government areas of Lithgow, Oberon, Bathurst, Blayney, Orange, Cabonne, Cowra, Parkes, Forbes, Weddin and Lachlan. / Contributing agencies and sponsors: A NSW Government Initiative A.P. Sheere Consulting Newcrest Mining’s Cadia Valley Operations contributed to this project as part of its Community Partnerships Program. / Disclaimer This report was produced by RDA Central West and does not necessarily represent the views of the Australian or NSW Governments, their officers, employees or agents. / Front cover: Ed Fagan, Cowra Photo by Kate Barclay / Publication design: Sauce Design Contents Introduction 5 Scope and Purpose 6 Methodology 6 Key Observation Highlights 7 Part 1 8 Value Adding 9 Biotechnology 11 Functional Foods 11 Protein and Animal Feed 15 Bioenergy 18 Digital Technology 20 The Digital Divide 20 Digital Platforms connecting agribusiness to capital 20 E-Commerce 22 Traceability 23 Processing and Packaging 24 The strength of Central West NSW fruit and vegetable processing 25 The decline of Central West NSW meat processing 27 Branding 29 Regional Branding 29 Industry or Sector Branding 29 A Central West NSW Brand 30 “Clean & Green” 31 The Organic Difference 32 Collaboration and Co-operation 34 Collaboration 34 Co-Operatives 37 Export Opportunities and Trade Agreements 40 Part 2 43 Central West NSW — an overview 44 Blurred Boundaries 44 Agricultural land and sector characteristics 45 Agricultural Production 47 Gross Regional Product 48 Employment 48 Agricultural Jobs 49 / Value Adding to Agriculture in Central West NSW / 3 Livestock 50 Sheep 50 Beef 51 Pigs 51 Poultry — meat 52 Poultry — eggs 52 Goat 53 Deer 54 Alpaca 54 Export Opportunities 54 Horticulture 56 The changing wine industry in Central West NSW 57 Protected Cropping 58 Export Opportunities 59 Irradiation 61 Dairy 62 Export Opportunities 63 Investment in Dairy 63 Wool 65 Alpaca fibre in Central West NSW 66 Export Opportunities 66 Broad-acre cropping 67 Export Opportunities 69 Survey Analysis 70 Key Observations 72 Jobs & Skills 72 Agricultural Sectors 72 Export Opportunities 72 Regional Innovation Hubs 72 Biotechnology 73 Digital Technology 73 Processing and Packaging 73 Branding 73 Collaboration and Co-operation 74 Freight and Logistics 74 Bibliography 75 4 / Value Adding to Agriculture in Central West NSW / Introduction This study was born of a The Central West and The Central West currently mutual recognition across key Orana Regional Plan (Draft) exports 65% of its agricultural stakeholders and government specifically states that; “the NSW production in commodity bodies in the region, including Government will work with form.2 This shows that despite Regional Development Australia Regional Development Australia the number and variety of Central West, NSW Department Central West and Industry NSW to agribusinesses and food of Industry (Western NSW), prepare and implement a value- enterprises, the majority of the Department of Premier adding strategy for the Central wheat, livestock and horticultural and Cabinet and Central NSW West area.” products currently leave the Councils (Centroc), that a food region without additional and fibre strategy was needed Debate rages over whether value adding. to ensure a sustainable, diverse agriculture will replace mining agricultural economy reflecting as Australia’s next big boom This report reviews current the changing global landscape. to become the “food bowl of agricultural value adding tends Asia”. There is, however, general and opportunities in Central West In 2016, NSW Department consensus that, due to the NSW, with particular focus on of Planning and Environment growing Asian middle class, the categories of biotechnology, released two reports relating to a well-managed Australian digital technology, processing agriculture and broader regional agriculture has a bright future. and packaging, branding, and development and planning for co-operation and collaboration. the Central West and Orana Agriculture represents 7.7% of The report relies heavily on the regions; Central West NSW’s GRP and is a case studies of Central West 1. Central West and Orana key industry for the region.1 agribusinesses. Agricultural Industries Report (Jan 2016) 1 Regional Development Australia Central 2 Ibid 2. Central West and Orana West (2014) NSW Central West Export/ Import Contribution Study Regional Plan Draft (April 2016) / Value Adding to Agriculture in Central West NSW / 5 Scope and Purpose The purpose of this report is to The most significant aspect of business information including provide deeper analysis of the the project was the interview approximate annual turnover, agriculture sector in Central West stage, which involved face- number of staff, location and core NSW including the current value to-face meetings with over business type. The survey asked adding landscape. This report twenty regional agribusinesses. participants why their business assesses trends across various Individual case studies and was based in Central West agricultural sectors, considers business perspectives form a NSW and the advantages and domestic and international key component of the report. disadvantages of their location. market demand trends and All interviews were followed Participants were also asked factors such as Free Trade up with phone calls and emails to describe any value adding Agreements that may impact and subjects were given the activities they were currently future growth, and identifies opportunity to proof read engaged in or planned to promising opportunities to transcripts of their interviews engage in. increase the extent of value- to ensure no information of adding in niche areas. This report a commercial in confidence Over 100 surveys were relies heavily on the experiences nature was revealed. Developing distributed through various and insights of regional and maintaining trust with local food and agribusiness networks agribusiness case studies. businesses was imperative in including RDA Central West’s order to ensure meaningful own database, Agribusiness METHODOLOGY participation in the process. Today forum members (including regional LLSs), Farmers’ Markets The first stage of this report During the case study process, networks and through RDA involved the completion of a four key agribusinesses were Central West’s social media comprehensive literature review selected to be interviewed, pages (Twitter and Facebook) and desktop study. Sources used resulting in the production of and newsletter. Surveys include industry and academic a two-minute video showcase completed and returned for research papers, government designed to be used on a analysis represented a range reports and media commentary variety of mediums to promote of agricultural sectors and covering regional, national and investment and agribusiness in businesses including dairy, meat, global issues relating to the Central West NSW. horticultural and grain producers, broad field of value adding to organic farmers, wine producers, agriculture and current trade The five key “value-adding” bee keepers, cheese makers, opportunities. Please refer to categories featured in this fibre and meat processors and the bibliography for a full list report (biotechnology, digital packaging enterprises. of sources. technology, processing and packaging, branding, and The second stage involved collaboration and co-operation) stakeholder consultations were identified as a result of the including State and Federal stakeholder engagement and Government departments, individual business case studies. research and academic institutions, banks, industry The final stage of the project bodies and individual businesses. involved the development, Please refer to the stakeholder list distribution and analysis at the end of this document for of an on-line survey. The more information. survey established basic 6 / Value Adding to Agriculture in Central West NSW / KEY OBSERVatiON accessibility to major centres; supply chain may present HIGHLIGHTS / Existing industry confidence opportunities for some niche in the region with two private sectors. JOBS & SKILLS enterprise biotechnology ventures already operating; Investment in innovative Although it is one of the most / The location of the NSW processing and packaging R&D important sectors and employers Department of Primary and infrastructure may create in the region, jobs are shrinking in Industries; new opportunities for both agriculture in Central West NSW. If / The region’s close ties with domestic and export value the region is to leverage the value Charles Sturt University adding to a broad range of adding opportunities afforded and the Graham Centre for agricultural sectors in the region. by the predicted growth of the Agricultural Innovation; agricultural industry, it will have / The region’s attractiveness BRANDING